Do Florida Non-Compete Agreements Protect An Employer’s Referral Sources?

Florida's non-compete statute authorizes courts to enforce a non-compete agreement under certain conditions. Historically, non-compete agreements are viewed as restraints on trade and contrary to public policy. However under Fla. Stat. § 542.335, non-compete agreements are enforceable if they protect one or more legitimate business interests. While section 542.335 lists five recognized legitimate interests, the list is non-exclusive, meaning courts are free to identify additional business interests which may be protected.

In Southernmost Foot and Ankle Specialists, P.A v. Torregrosa, 891 So. 2d 591 (Fla. 3d DCA 2004), Florida's Third District Court of Appeal held that the "referral doctors" who referred patients to a South Florida podiatry practice were included among the legitimate business interests the court would protect.

Southernmost involved a podiatry practice and one of its physicians who signed a non-compete agreement as part of his employment with the practice. The employee-physician soon decided to leave the practice and the employer sued, alleging breach of the employment agreement and seeking various forms of relief. Id. at 593. Following an expedited bench trial, the trial court found that the employer had legitimate business interest in its patient base, referral doctors, specific prospective and existing patients, and patient goodwill. Id.

On appeal, the Third District concluded that trial court was correct in finding that the non-compete agreement was reasonably necessary to protect the...